Dubai is emerging as a new competitor to the London insurance market, the chief executive of Lloyd's of London has warned.
Richard Ward said underwriters in London — the world's largest insurance market — are facing growing competition as local insurers spring up in Dubai and increasingly underwrite straightforward risks in the area.
"Local markets are developing. What is clearly happening globally is that a lot of risks are having more tendency to be placed locally, rather than internationally," he explained. "The challenge is to respond to that and ensure we see risks that would come ultimately back to the market place."
Mr Ward, who joined Lloyd's in April 2006, has a vast knowledge of the Middle East, having worked in the oil industry. His comments will startle the insurance market, which has previously viewed its major competitors as the tax-free domiciles of Bermuda, Gibraltar and Dublin. However, the Gulf markets have seen a sudden growth as the region benefits from higher oil prices.
Mr Ward said the assault on the insurance market was part of Dubai's attempts to become a major economic centre. He suggested that last month's announcement that Borse Dubai will buy Scandinavian stock exchange OMX for $4.72bn in cash and then immediately sell it on to US exchange Nasdaq was just the beginning. Following the transactions, Borse Dubai will become Nasdaq's largest investor with a 19.9pc stake.
"Dubai, Qatar and a number of other markets in the Middle East are developing," Mr Ward explained. "The rate of change is quite phenomenal."
Jardine Lloyd Thompson (JLT), one of the leading brokers in the credit and political risk area, will launch a new model tomorrow, looking at different risk levels in 197 countries. Confirming the stable rating for the United Arab Emirates, Dr Elizabeth Stephens from JLT said: "It is an attractive market — higher risk than western Europe but lower than South Africa or Turkey."
Richard Ward said underwriters in London — the world's largest insurance market — are facing growing competition as local insurers spring up in Dubai and increasingly underwrite straightforward risks in the area.
"Local markets are developing. What is clearly happening globally is that a lot of risks are having more tendency to be placed locally, rather than internationally," he explained. "The challenge is to respond to that and ensure we see risks that would come ultimately back to the market place."
Mr Ward, who joined Lloyd's in April 2006, has a vast knowledge of the Middle East, having worked in the oil industry. His comments will startle the insurance market, which has previously viewed its major competitors as the tax-free domiciles of Bermuda, Gibraltar and Dublin. However, the Gulf markets have seen a sudden growth as the region benefits from higher oil prices.
Mr Ward said the assault on the insurance market was part of Dubai's attempts to become a major economic centre. He suggested that last month's announcement that Borse Dubai will buy Scandinavian stock exchange OMX for $4.72bn in cash and then immediately sell it on to US exchange Nasdaq was just the beginning. Following the transactions, Borse Dubai will become Nasdaq's largest investor with a 19.9pc stake.
"Dubai, Qatar and a number of other markets in the Middle East are developing," Mr Ward explained. "The rate of change is quite phenomenal."
Jardine Lloyd Thompson (JLT), one of the leading brokers in the credit and political risk area, will launch a new model tomorrow, looking at different risk levels in 197 countries. Confirming the stable rating for the United Arab Emirates, Dr Elizabeth Stephens from JLT said: "It is an attractive market — higher risk than western Europe but lower than South Africa or Turkey."
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